Dairy giant Fonterra has struck a deal with Hastings food and drink manufacturer Apollo Foods to make "millions of litres" of flavoured milk drinks.
Both companies have agreed to install state-of-the-art technology, which produces millions of litres of beverages each year from the Apollo Foods plant in Whakatu.
Although arrangements were commercially sensitive and could not be revealed, Fonterra's NZ managing director of brands, Leon Clement, said Apollo's new operation included innovative beverage filling technology that allows a range of different containers to be produced on site and filled with different products on the one production line.
The technology at the plant provided market-leading quality control and allowed a superior fresh taste experience over an extended shelf life.
A global surge in demand for dairy and fruit beverages presents a fantastic opportunity for both companies, a Fonterra spokeswoman said.
"By taking an innovative partnership approach to production with Apollo Foods, we have been able to open up new opportunities for future brands – and create even more value for our farmers."
Production of a new look, new formulation, "Mammoth" flavoured milk, which contains 40 per cent less sugar and had a shelf life of six months was already under way at the Whakatu plant.
The arrangement would allow both companies to take the lead in their categories and benefit from new technology to supply consumer drinks to the growing market.
"I am absolutely thrilled and privileged to work with Fonterra Brands New Zealand to bring added value beverages to the global consumer – and better still that we are producing it all right here in Hawke's Bay," said Apollo Foods managing director Ross Beaton.
Hastings Mayor Sandra Hazlehurst also welcomed the announcement.
"It's fantastic to see new leading-edge production facilities choosing Hawke's Bay as their location. It cements our beautiful district as a leader in food production."